Home > The Stock Market > PLAYING TODAY’S STOCK MARKET TIP #4: PLAY SMALL WHILE YOU LEARN!

PLAYING TODAY’S STOCK MARKET TIP #4: PLAY SMALL WHILE YOU LEARN!

October 23rd, 2011

PLAY SMALL WHILE YOU LEARN: Gladly pay the price of apprenticeship. Learn, experience, and practice in a safe environment so that your early mistakes can’t hurt you. Don’t play big until you’ve gained enough mental and emotional experience to trade confidently.

This is especially true when traders finds themselves “squeezed” in heavy short positions during violent stock market rallies. Beware of the reassurances of some investment advisors who claim that shorting the stock market can be a sensible way to invest your money. What’s not mentioned by such advisors is that successful short-selling requires more awareness, discipline, and experience than traditional trading on the long side. For the majority of non-professional investors, it’s wiser and safer to be on the sidelines planning your next move to the upside than it is to be emotionally involved trading the short side of the market. (Note: The act of “shorting” or to “go short” means to bet that a particular stock is going to go down in price instead of up.)

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“Timidity prompted by past failures causes investors to miss the most important bull markets.”

Walter Schloss ~ Value Investor Who Learned From Benjamin Graham

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